I have a question about underground oil tank. I want to make offer on a three family property that has an underground oil tank in New Jersey. All I know is that it the tank is there I don't know if it was filled or was being used. I have to replace heating with gas boilers. This is a buy and hold property. I will be purchasing the property using a hard money lender and refinancing with a portfolio lender. Do portfolio lenders have restrictions on underground oil tanks? Any information or insight on the topic would be helpful. Thank You
@David H. I have been through this scenario twice now as an agent and then as a buyer. I recently sold a three unit listing in Berwyn, IL, and the owner ended up having to take an under ground oil tank out before closing. Total cost came in at around $6500, and the main annoyance was that the contractor had to wait for the EPA and the State Fire Marshal to coordinate things. There does not appear to be a "cheap" way around this issue, and if you have a tank in the ground I would recommend budgeting for complete replacement with plenty of margin in case it costs more than you think. If you have spoiled soil underneath you have to pay to get that re-mediated as well, so it can be more than the 6500 for sure.
I agree with @John Warren . We went thru this on a house we purchased. State EPA gets involved. They had to come out and inspect before removing. Once it is removed they test soil for any traces of fuel in soil. If they find fuel in the soil the soil has to be removed and is now considered contaminted and has to be disposed of in a special area. They keed testing and remving dirt until they can not find traces of fuel. Can get very expensive. In our case the tank had not leaked. We requested the seller pay the cost of the removal.